High Court Upholds Health Law Subsidies

The Affordable Care Act survived its second Supreme Court test in three years, raising odds for its survival but by no means ending the legal and political assaults on it five years after it became law.

The 6-3 ruling stopped a challenge that would have erased subsidies in at least 34 states for individuals and families buying insurance through the federal government's online marketplace. Such a result would have made coverage unaffordable for millions and created price spirals for those who kept their policies, many experts predicted.

Chief Justice John Roberts wrote the opinion for the court, joined by frequent swing vote Anthony Kennedy and the liberal justices Ruth Bader Ginsburg, Stephen Breyer, Sonya Sotomayor and Elana Kagen.

"The combination of no tax credits and an ineffective coverage requirement could well push a State's individual insurance market into a death spiral. It is implausible that Congress meant the Act to operate in this manner," said Roberts.

Consumer advocates were hopeful for this outcome.

"The first thing going on for a huge swath of people is relief that we didn’t blow up the system," said Lynn Quincy, a health policy specialist at Consumers Union. "The law was never meant to work without this pillar in there," she said of the subsidies.

But even a victory for the law closely identified with President Barack Obama leaves the health system with incomplete insurance coverage, rising costs and other uncertainties. The ACA itself still faces several lawsuits, although some believe Thursday’s decision will discourage judges from advancing the cases.

"It sends a message to the lower courts that they need to take a good, hard look at all the ACA litigation that's out there and probably clean up and get rid of most of it,” said Timothy Jost, a law professor at Washington and Lee University and an expert on the health law.

Kaiser Health News interviewed Jost and other authorities before Thursday’s decision in a case known as King v. Burwell asking them to explain the implications of upholding the law.

Republicans controlling Congress are likely to advance new legislation amending or repealing the law, although it is even more likely to be vetoed by President Barack Obama if it gets to his desk.

The high court decision sets up the 2016 presidential election as the health law's next big test, although by then it could be difficult to fully uproot even if Republicans take the White House.

"With another year and a half of business as usual under the ACA, if it's a Republican as the next president, it'll be that much more difficult to make changes," said Joseph Antos, a health care economist at the American Enterprise Institute.

The case hinged on tax credits created by Congress to help middle-income consumers buy insurance through online marketplaces, also known as exchanges.

The subsidies are available through an exchange "established by the state," according to the law.